The election on Saturday was an incredible response: one that was not anticipated by our practice.
It is important to look back on why this was potentially important. It was important because the opposition government had anticipated a range of significant tax changes that would have made an incredible change to the tax and business structures for our clients.
The opposition wanted to tax trusts as if they were companies. They wanted to change the tax benefits associated with patiently letting your capital grow. They wanted to change the tax deductions associated with buying assets. They wanted to increase the burden of taxation from monies coming from companies. And they wanted to increase the after tax cost of obtaining quality tax advice.
All of those tax changes proposed by the opposition would have come in with a very short time frame.
So yes. Our practice had done a lot of preparation work for a labor victory. We had a polished newsletter informing our clients of what was happening. We had a series of workshops planned for our clients on how to deal with the tax changes. And we had modelled and altered our future tax structures for assets given the long term and significant tax impact by the opposition.
Yes, all of that effort has gone to waste.
Thankfully what has not gone to waste was the effort spent by our clients in getting ready. Our underlying mantra at all times for our clients was to not do anything until after the election. We did not charge $1 in fees to any of our clients in getting prepared for the changes.
What is the net take-away? That waiting for detail is better than betting on an uncertain outcome. And that a lot of the talk in tax, finance and asset structuring in simply a way to garner publicity and marketing.
However, when it comes to choosing a trusted advisor – talking to independent advisors who don’t take success fees, advisors who are qualified to give tax advice, advisors with proven experience in starting a family business – is really the only option.
If your advisor is conflicted, if they take fees as a percentage, if they have never started a business, or if they are running a scare campaign – you are better off spending your money with somebody else.